How Spirit Is Dealing with Max Grounding

The top executive of Boeing’s largest 737 Max supplier, Spirit AeroSystems, provided more detail about how it’s responding to the airplane’s grounding during the company's second-quarter 2019 earnings call this week. Spirit CEO Tom Gentile explained that the supplier, which manufactures the Max’s fuselage and other structures, continues to build the fuselages at a rate of 52 a month and expects that to remain unchanged through 2020.

Completed fuselages are stored for between 10 and 20 days before Spirit ships them by rail from Wichita to Boeing’s 737 factory in Renton, Washington. So far, Spirit has stored and shipped 130 of them, and currently has 35 stored outside at nearby Air Capital Flight Line. Fuselages are wrapped in a three-layer process to protect them from the weather, a procedure that takes four hours.

To keep costs in check, Spirit has undertaken a number of measures, including four-day workweeks for about 6,000 workers; 10-day furloughs for other workers as well as senior leaders; and a voluntary retirement program in which nearly 200 participated. It also reduced contract workers and cut overtime by half.

Should a Max return-to-service be delayed beyond 2019, “we have been doing that scenario planning and we are going to be prepared to respond to whatever [Boeing does],” Gentile added. “We have looked at slowing down production. We have looked at doing some temporary pauses in production.”